Expert Panel report recommends NEB overhaul – but is it enough?

On Monday, the Expert Panel on the Modernization of the National Energy Board (NEB) released its report and recommendations on how to fix Canada’s broken pipeline regulator. The Panel appears to have responded clearly to Canadians from coast to coast that have lost confidence in the NEB. It’s even gone as far as recommending abolishing the NEB and replacing it with new agencies for the review and regulation of energy projects and the collection of energy data.

Photo Credit: CBC

The report includes some helpful and transformative recommendations to fix the NEB, but it falls short of providing a comprehensive blueprint to build an energy regulator that regains public trust and takes Canada’s climate commitments seriously. The report makes things particularly awkward for the proposed Energy East pipeline, as the federal government insists on moving forward with the pipeline’s review using the broken, outdated process panned by the Expert Panel.

Last summer, the Expert Panel was created to review the NEB’s structure, role, governance and mandate, and restore public confidence in the energy regulator. Environmental Defence participated in the Panel’s consultations and submitted ideas for reforming the NEB and applying a “climate test” to major energy projects.

The Panel deserves credit for its report. It acknowledges that the NEB needs transformative change, to the point of recommending completely abolishing and replacing it with a “Canadian Energy Transmission Commission.” The Panel made several key recommendations that aligned with Environmental Defence’s, including:

Creating a new “Canadian Energy Information Agency” that would centralize information about energy and better align energy data with climate policy;

Moving NEB headquarters to Ottawa from Calgary, where it has tended to attract Board members with close ties to the oil and gas industry;

Enhancing public participation and lengthening the timelines of reviews of major energy projects like Energy East;

Respecting Indigenous rights and title and improving consultation with Indigenous Peoples on a nation-to-nation basis in every stage of a project;

These are changes we can get behind. But the Expert Panel falls short of fixing the energy project review process and ensuring projects are aligned with Canada’s climate commitments. Some particularly problematic recommendations include:

That the federal Cabinet take just one year to determine that a proposed energy project is in the national interest, before the project receives an environmental assessment (EA) and fulsome review. This means that projects—like tar sands pipelines– could be approved by the federal government without critical information about their social, economic and environmental impacts. This is exactly what the oil industry asked for.

Leaving responsibility for EAs with the NEB. This directly contradicts the recommendation of the federal government’s Expert Panel on the Reform of Environmental Assessment Processes to remove EAs from the NEB and create a new agency responsible for all EAs;

No “climate test”. While the Expert Panel recommends evaluating a project’s upstream and downstream greenhouse gas emissions as part of a Cabinet decision on “national interest”, it falls short of recommending a proper climate test. The energy project review process must ensure that all projects fit within Canada’s climate targets and make economic sense in a world that meets the Paris Agreement to limit global warming to 1.5 degrees Celsius. The climate test needs to be a deal-breaker—if a project fails the test, Cabinet must reject it.

The Panel recommends that Canada develops a national energy strategy. We agree, but an energy strategy must also be a climate strategy that ensures Canada’s production and use of energy is aligned with Canada’s climate commitments. This would set the framework for the climate test.

There’s one project in particular that’s stuck on the wrong side of NEB Modernization—Energy East. Last week, the NEB took steps to move forward with the review of Energy East, using the broken, outdated process of a regulator that could now be abolished. Continuing the pipeline’s review after such strong recommendations to fix the NEB would destroy what little credibility the review has left.